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WHY SME ??? LESS CAPITAL INTENSIVE---(SCARCE CAPITAL IN INDIA) MORE LABOUR ORIENTED----(POPULATION IS VERY HIGH) HELPFUL IN GROWTH OF HANDICRAFT & OTHER SKILL ORIENTED INDUSTRY SME PLAYING IMPORTANT ROLE IN INDIAN ECONOMY----------------

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OUT LOOK FOR SMEs SMEs continue to be the thrust area for Government Policy. Panacea (solution) for employment and decentralized industrial development The growing economy and the tremendous market potential of the country augurs well for the sustained growth of SMEs in the country Latest Policy Package for SMEs envisages 20% annual growth in credit to SME sector from FY 2005 to be doubled by 2010. With the enactment of MSMED Act, 2006, the sector is all set to emerge as the most significant player in National Economy.

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19 FM Package-Action PointsAction Taken by the Bank SSI Advances 20 % YoY Growth- Double in 5 years up to 2009-10 During 2007-08, Ambitious targets allocated to Zones. Growth of 28.08% registered in SSI advances and combined growth of 24.14% in SSI & Medium Enterprises Credit to 5 new Tiny/SSI/ME units per each Semi-Urban & Urban Branch- every year. Adoption of Credit Rating System ( CRS). Risk Rating Models for Small & Medium Enterprises with Credit Facility from Rs. 2 lakh to 15 lakh in house developed & adopted by Bank. MOU with SMERA & CRISIL have also been entered in to for providing Risk Rating to PNB borrowers. Adoption of Cluster Approach.4 SME clusters adopted at Gurgaon, Kurukshetra, Ludhiana & Mandi Gobindgarh. Extended finance to 342 units of Rs. 254 crore. FMs PACKAGE FOR SME SECTOR- 2006-072007-08 Target78607965 Ach.2526933660

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THE MAJOR COMPONENT OF MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 1.Establishment of National Board for Micro, Small & Medium Enterprises ; Examine, make recommendations and advise GOI for facilitation, promotion, development and enhancing competitiveness of the Micro, Small & Medium Enterprises. 2.Classification of Enterprises (Definition) 3.Procurement Preference Policy Purchase goods & services, produced & provided by SMEs 4.Delayed Payment liability of the buyer to make payment within 45 days (earlier it was 180 days) 5.Marketing assistance and export promotion Support to SME entrepreneurs for participation in trade fairs and exhibitions – local as well as International Training programmes on packaging for exports Purchase preference to products in Government procurement Market Development Assistance Scheme for Publicity, Market Studies and adoption of Modern Market Practices.

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DEFINITION OF SME MANUFACTURING ENTERPRISES Enterprise engaged in the manufacture/production or preservation of goods –Micro whose investment in plant and machinery (original cost excluding land and building) does not exceed Rs.25 Lacs –Small whose investment in plant and machinery (original cost excluding land and building) does not exceed Rs. 5 crore –Medium whose investment in plant and machinery (original cost excluding land and building) does not exceed Rs. 10 crore SERVICE ENTERPRISES Enterprise engaged in the providing/rendering of services –Micro whose investment in equipment (original cost excluding land and building and furniture, fittings and other directly related to services rendered) does not exceed Rs.10 Lacs –Small whose investment in plant and machinery (original cost excluding land and building) does not exceed Rs. 2 crore –Medium whose investment in plant and machinery (original cost excluding land and building) does not exceed Rs. 5 crore

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PNB GREEN CASH CREDIT FACILITY PS&LB: SME CIRCULAR NO: 08/2007 SSI Units only 5% additional facility of sanctioned limit for meeting emergent statutory dues like Income tax, Sales tax, Excise duty and other expenses like Electricity charges, Custom duty, Telephone Charges ……subject to; –Maximum Rs. 1 Lac –SSI unit should be in Standard Category –Dealing with us for One Year –To be adjusted immediately- not later than one month –Can be allowed over & above adhoc(10%) or SME Sahayog(20%)

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To set up new units, expansion, modernisation & renovation of existing units, for purchase of land, constructions of building, machinery, equipment etc. & working capital facilities. ELIGIBILITY FOR FINANCING Small Enterprises : Units engaged in industrial activity with original investment in plant & machinery not exceeding Rs 500 lakh for SSI and ancillary units. ELIGIBILITY FOR FINANCING Micro Enterprises: Unit with investment in plant & machinery not exceeding Rs 25 lakh, irrespective of location of the unit.

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Financial assistance to be provided for acquiring ISO-9000) certification, i.e., expenses on consultancy, documentation, audit certification fees, equipment and calibrating instruments required would be taken into account for determining the loan requirement. ELIGIBILITY : Existing SSI units having good record of past performance. The concerns should have been in operation for a period of at least four years; have earned profit and / or declared dividend during the preceding two financial years; not be in default to institution / banks in payment of their dues, and have been exporting their products, directly or indirectly or have plans to manufacture products for exports. AMOUNT OF LOAN: Need based, by way of term loan

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To provide hassle free financial support to Small business units, Retail Traders, Artisans, Village Industries, Small Scale Industrial Units, Small Scale Services & Business Enterprises (SSSBEs) and Tiny Units, Professionals and Self Employed Persons, etc. ELIGIBILITY: Borrowers belonging to aforesaid categories enjoying Cash Credit limits upto Rs 10 lakh and whose dealings with the bank have been satisfactory for the last three years are eligible for issuance of Laghu Udyami Credit Card. EXTENT OF LIMIT: CC limit Max.upto Rs 10 lakh ASSESSMENT OF CREDIT CARD LIMIT (i) For small business, retail traders, etc. 20% of the annual turnover, (ii) For professionals and self-employed persons, 50% of their gross annual income as per Income Tax return. (iii) For Small Scale Industrial Units, Small Scale Services & Business Enterprises (SSSBEs) including tiny sector units the assessment norms in vogue as per the Nayak Committee recommendations.

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To provide hassle free financial support to Artisans and to make credit delivery simple and easy ELIGIBILITY: All artisans involved in production/ manufacturing process (and otherwise eligible for credit facilities for carrying out the proposed activities under any of the existing bank schemes) would be eligible. Preference would be given to artisans registered with Development Commissioner (Handicrafts) and Thrust in financing would be on clusters of artisans and artisans who have joined to form Self Help Groups (SHGs). NATURE OF LIMIT : Term Loan & Cash Credit Limit up to Rs. 2 lakh The Development Commissioner (Handicrafts) will pay/re- imburse one time Guarantee money and Annual service fee to bank for obtention of guarantee cover under credit guarantee scheme of CGTSI to facilitate flow of credit to the Handicraft Artisans.

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The scheme is applicable to existing borrowers whose accounts have been classified as standard assets as on 31 March for the last 3 consecutive years and is enjoying credit limits above Rs.20 lakh. For sanctioned limits (Term loan & working capital) of above Rs.20 lakh, the threshold credit rating should be BB' as on the closing of previous financial year. However, credit risk rating for any of the earlier years should not be below 'B'. EXTENT OF LOAN :- The eligible borrowers will be sanctioned a special credit limit for an amount equal to 20% of the aggregate working capital limits (i.e. fund based and non fund based separately) sanctioned to the unit, subject to a maximum of Rs.25 lakh and no further adhoc facility should be sanctioned. The limit can be utilized for contingencies like additional purchase of raw materials including packing materials/handling charges for the execution of bulk orders, taking part in national/international trade exhibitions for creating market base, payment of consultancy charges, repairs to machinery, labour payments, etc.

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SCHEME FOR FINANCING - PURCHASE OF NEW/OLD DIESEL GENERATING SETS WITH OR WITHOUT ACOUSTIC ENCLOSURES : To provide adequate & timely financial support from the banking system to the above categories of entrepreneurs who have shown commitment to run their SSI unit successfully, a new eco & entrepreneurs friendly credit product namely PNB SSI URJA SCHEME has been formulated. Under this scheme financial assistance for purchase of New/Old Diesel Generating Sets with or without acoustic enclosure for controlling noise pollution will be provided to the existing & new borrowers/units. EXTENT OF LIMIT: Need based. NATURE OF LIMIT : Term Loan

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CREDIT LINKED CAPITAL SUBSIDY SCHEME FOR SSI UNITS Purpose:Purpose: The scheme aims to facilitate technology upgradation of SSI units in the specified products/sub-sectors by providing 12% capital subsidy for induction of proven technologies approved under the scheme Types of unit:Types of unit: Existing as well as new unit registered with DIC are covered under scheme Technology:Technology: Benchmark technology level has been defined in the scheme for 30 industries. Subsidy:Subsidy: 15 % Capital Subsidy is available under the scheme

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REMEMBER… PNB CARES FOR YOU HELPS TO MEET ALL YOUR FINANCIAL NEEDS, WITH LATEST BANKING TECHNOLOGY & BACKED BY A HIGHLY EXPERIENCED & DEDICATED STAFF ! …the name you can BANK upon &